Ostensibly the bill is designed to provide a "level playing field"
between local government municipal service projects and local private sector.
However, the bill contains redundant language and sneaks in some
provisions that could be the death of municipal services.

The U.S.
Federal Communications CommissionerMignon Clyburn on
Monday weighed in [PDF] to the debate, blasting the
measure. Similar to our analysis, she asserts that the bill's provisions
first seem worthwhile/innocuous, but the actual language allows for disturbing
possibilities. She states, "This piece of legislation certainly
sounds goal-worthy, an innocuous proposition, but do not let the title fool
you."

She goes on to write:

This measure, if enacted, will not only fail to level the playing field; it
will discourage municipal governments from addressing deployment in communities
where the private sector has failed to meet broadband service needs. In other
words, it will be a significant barrier to broadband deployment and may impede
local efforts to promote economic development.

I remain concerned that when cities and local governments are prohibited from
investing directly in their own broadband networks, citizens may be denied the
opportunity to connect with their nation and improve their lives. Local
economies will suffer as a result, and the communities' ability to effectively
address education, health, public safety, and other social issues will be
severely hampered.

At this point, the FCC is still trying to scrounge up spectrum for an auction
tentatively slotted for 2012. That auction might allow for the creation
of a national broadband offering. However, even
the FCC seemingly concedes that a national offering could be less efficient
than a local-based one, backed by the community.

At the root of the issue is the lack of competition in the market. High
costs are certainly one barrier to entry. And the tendency of state
legislators/courts to cast a blind eye on anticompetitive tactics from their
local telecom only worsens the matter.

Arkansas and South Carolina are reportedly considering measures similar to
North Carolina's.

Some provisions of the NC bill certainly seem valid -- for example that the
projects need to be approved by local voters in a special election and that
town hall meetings must be held before hand.

However, other provisions are baffling. For example, the services are
banned from exercising the same pricing methodology as their corporate
"competitors". In that regard, if anything the bill creates an unlevel
playing field.

Further, even if voters approve of it, cities are disallowed from using much of
their funds to finance the project. And there are restrictions on their
ability to seek loans from the private sector. To make matters worse,
they have to pay themselves a tax on the service, which they cannot
reinvest into improving the service.

And then there's the issue of the state panel created by NC's pending
legislation. That panel would be granted the power to override voters in
a municipality and kill outright or otherwise stall to death broadband
projects. At a time when telecoms are pouring thousands in campaign
donations to state senators and representatives in an effort to preserve their
monopolies/duopolies, this certainly seems like a dangerous allowance.